Saturday, September 23, 2017

WARNING Federal Reserve to Launch Its Own E-currency: Fedcoin

By Robert WenzelThe U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it, according to Doug Casey.“To start with, I suspect it’s going to be a parallel currency. Perhaps usable just within the U.S. which, in effect, would be a form of foreign exchange controls even more effective than the inability of Americans to open up foreign bank and brokerage accounts today [due to monetary control through FATCA]…I think it’s a near certainty that they’re going to do something like this and soon.”They will call it Fedcoin.David Andolfatto, vice president at the St. Louis Fed, proposed the word “Fedcoin” in 2015. He’s spoken publicly about this multiple times since then, and says Fedcoin could give the central bank an “added (policy) tool.”Andolfatto wrote in a Newsweek article:

My own recommendation is for central banks to consider offering digital money services (possibly even a cryptocurrency) at the retail and wholesale level. There is no reason why, in principle, a central bank could not offer online accounts, the same way the U.S. Treasury presently does...

They would give monetary policy an additional instrument—the ability to pay interest on low-denomination money (possibly at a negative rate)....

It's hard (for me) to see what the downsides are in having a central bank supply digital money.

In the article entitled “Fedcoin”, J.P. Koning speculates, “The Fed would create a new blockchain called Fedcoin. Or it might create a Ripple style ledger by the same name. It doesn’t matter which. There would be an important difference between Fedcoin and more traditional cryptoledgers. One user—the Fed—would get special authority to create and destroy ledger entries….The Fed would…provide two-way physical convertibility between both of its existing liability types—paper money and electronic reserves—and Fedcoin at a rate of 1:1.”Casey warns that with blockchain and the Fedcoin technology, the government will be able see everything, everywhere...Without cash, you have no privacy. If you have to put everything through a bank account, the government knows exactly what you’re buying, what you’re selling, how much you are earning. They’re in complete control; able to take what they want…including your entire account if you become politically undesirable.If the government and Federal Reserve decide to implement something like “Fedcoin,” they’ll be able to modify the blockchain to suit their needs…They’ll be able to see every transaction… impose extra taxation through negative interest rates… and do just about anything they please, says Casey.Casey adds:

[Fedcoin will be] like an anti-cash. If I've got a $100 bill in my wallet or a bunch of 10s and 20s, I can spend them on anything I want with anybody I want and nobody knows.With blockchain, I can only send that money to somebody else who's got a receptive smart phone or chip and they know exactly who's getting the money and what it's being spent for. It can be programmed so that certain transactions can't take place or transactions with certain people or stores or whatever. So you are pretty well blocked in.I mean, for all I know, they might decide that, under your Obama Care or whatever comes of that, after it; you're too fat. You can't buy sugar, but if you can't buy sugar, who can buy sugar? I mean, how are you going to pay the other person to buy sugar if you want sugar?You want ammunition for your gun? Well, maybe you can't buy it. How are you going to get it? How are you going to pay for it?

This is a real personal freedom problem and it's going to be sold to the American people under the guise of convenience and safety and fighting drugs and fighting theft and fighting crime and fighting terrorism and all the usual nonsense. But it's going to be devastating to our freedom and economic progress in this country....The most important thing to remember is that the paper dollar, the $100, the $50 bill, currency itself is on its way out. It's going to be replaced strictly with digital money as is happening in other places in the world right now. This has got very serious consequences for you on all levels. So plan your life around that.

In July 2017, a group assembled by the Federal Reserve, known as the Faster Payment Task Force, put out what it called a Final Report (Part 2) A Call to Action.

The Faster Payments Task Force calls upon all stakeholders to seize this historic opportunity to realize the vision for a payment system in the United States that is faster, ubiquitous, broadly inclusive, safe, highly secure, and efficient by 2020. This report provides the roadmap.

The report covered a multitude of payment topics but in the e-currency section of the report, the group covered an e-currency it called Wingcash. It has all the disturbing elements of Fedcoin, just a different name:

• Federated Identity Management – Building on the concept of digital identity,
multi-operator environments will benefit from an established set of rules and protocols
that will link a person’s electronic identity and attributes when it is stored across multiple, distinct identity management systems. Several standards organizations such as National Institute of Standards and Technology (NIST), Fast Identity Online Alliance (FIDO), Identity Assurance Framework (The Kantara Initiative), and the National Strategy for Trusted Identities in Cyberspace (NSTIC) have set the stage for development of federated identity frameworks

The 2020 deadline may be a little ambitious for Fedcoin, there were many payment actions discussed in the task force final report, many having nothing to do with e-currency, but it is clear that a Federal e-currency is well along in the planning stage. It's coming.

10 comments:

An utterly idiotic analysis by an otherwise smart man. And therefore, Wenzel, the techPretzel had to push the story. Because the Libertardians can't stop reciting just their 3 volume bible (Mises, Rothbard and Ron Paul editions), they have no time to learn about anything else.

Idiot, you can't see how a "fed coin" with a single entry controlled ledger is not a cryptocurrency, you are an idiot not worth explaining things to. But you are not alone, most libertarians no nothing about cryptocurrencies, though Bitcoin is the perfect manifestation of austrian economics in history.

None of the people mentioned above have any fucking clue what true cryptocurrencies are. A ledger with one party being able to create/destroy transactions is not a blockchain. Idiots don't even know basics

Reading comprehension problem? Sorry to ruin your analysis but the ledger referred to by Koning is clearly identified as different from the current blockchain. There would be special privileges designed-in for the Fed. That is a major part of the problem and he makes that very clear.

Idiots don't even know that "the Blockchain" controlled by a single entity is not just "problematic", it's just not a blockchain at all. Bitcoin blockchain was invented and relies on distributed consensus, not "Fed control". That's why most lolbertarians are irrelevant. They no nothing of any other forces that shape the future of humanity beyond the three books they read from Mises, Rothbard and Ron paul

Why do you think that? The blockchain concept was created to log every transaction. Did you really believe that it would be private and untraceable? Or if that was the real intent stay that way for long?

No single entity need control the blockchain it only need be able to read it. Sure control and preventing purchase would be nice but all that is really needed is the ability to monitor it and punish what isn't acceptable. The idea is to control society, micromanage individuals. Everything could go to bitcoin because government already knows how to read the blockchain to see who does what.

I would not be surprised that if in a few decades we'll learn that the mysterious inventor of bitcoin worked for the CIA, NSA, or some other government or banking entity. Created it for the express purpose of getting us all accustomed to a cashless concept where every transaction is logged and known to the government and/or central bank.

Wild pigs are dangerous, suspicious, and free. Either they run away and you can't get near to them, or they will attack you fearlessly with their large tusks and long teeth. How in the world could you ever catch a group of them?

Put corn on the ground in a small clearing in the woods. After a while, they will occasionally come to eat the free corn. Eventually, they will come every day. When they get used to that, put a fence along one side of the area. They will stop eating for a few days. Eventually, they will get used to the fence and they will resume eating the corn. Then, put up another side of the fence. They will get used to that.

Continue until you have all four sides of the fence with an open gate. The pigs will soon come through the gate to eat. Slam the gate on them and catch them all.

Suddenly, the wild pigs have lost their freedom. They will run around frantically, squealing, but they are caught. Soon, they will go back to eating the free corn. They are used to it and have forgotten how to forage for themselves, so they accept their captivity.

That is how we can all lose our freedom. Slowly, and then all at once.

I count two good things about crypt-o-currencies: making non face to face transactions (1) easier and (2) less costly by eliminating middlemen.

What will probably prove to be the best thing to come out of Bitcoin is the Blockchain: A database that is continually reconciled, duplicated and stored multiple times across a network of computers. This could be great for information we want to be decentralized and public.

Fedcoin sounds like it will eliminate all of the good parts crypt-o-currencies and the Blockchain.

I just listened to an interview of Jeffrey Tucker by James Corbett where Tucker commented on some crypt-o-currencies geeks meeting with Federal Reserve banksters and showed them how crypt-o-currencies work. Tucker said the banksters were totally clueless. Should have left them that way. Did the crypt-o-currencies geeks think the Fed was going to use the info for good?